Nov 29 2007

Rule #1

Published by admin

The Simple Strategy for Successful Investing in Only 15 Minutes a Week!

Rule #1 of investing, as ascribed to Warren Buffett, is: Don’t lose money. To put that rule in more practical terms:

Always buy a wonderful business at an attractive price.

  • Find a “wonderful” business
    • Meaning — you understand and value what it does
    • Moat — it has financial strength and predictability
    • Management — a great management team is there
    • Margin of Safety — it is available at a great price
  • Determine what that business is truly worth
    • Current earnings per share (EPS)
    • Estimated future EPS growth rate
    • Estimated future price/earnings (PE) ratio
    • Minimum acceptable rate of return
  • Buy it at 50 percent off
    • MACD — moving average convergence divergence
    • Stochastics — overbuying and overselling of a stock
    • Moving average — average price of a stock over a time period
  • Repeat until rich

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